TOKYO – The latest tranche of Japan's growth strategy will aim to triple infrastructure exports and double farm exports by 2020, as well as boost private investment, Prime Minister Shinzo Abe said on Friday.
The government will set a target for domestic private-sector investment of 70 trillion yen ($687 billion) annually, Abe said in a speech to business executives and academics, the level before the 2008 financial crisis and up about 10 percent from the current figure.
Measures to promote growth constitute what Abe calls the "third arrow" in his policy quiver as Japan battles to end 15 years of deflation and generate sustainable economic growth. The first two arrows of "Abenomics" are massive monetary easing and a burst of government spending.
Abe has promised that structural reform including deregulation will be a key part of the package of steps, to be fully unveiled in June. But it also includes a significant role for government in generating investment and innovation in key sectors, a stance some critics see as outdated and ill-advised.
The monetary and fiscal stimulus already sparked Japan's fastest economic growth in a year in the first quarter, but corporate investment has yet to follow suit.
Promising to be a "top salesman" for Japanese infrastructure exports, Abe vowed to promote private-sector investment at home and asked corporate Japan to do its bit to pass on the benefits of "Abenomics".
"The government will broadly implement a growth strategy starting with making it easier to invest, and I would like you business executives to pass on the fruits of this to working people in the form of jobs and compensation," he said.
Politicians in Abe's Liberal Democratic Party (LDP) worry that, while share prices are up and the yen's value is down, boosting corporate profits, Japanese households have yet to see the benefits in the form of higher wages, although prices are starting to rise.
Abe, who took office in December after a big LDP election win, has said he wants to unveil the growth strategy before a June 17-18 Group of Eight summit in Northern Ireland. That would also come ahead of a July upper house election his party needs to win to cement its grip on power and set the stage for a long-term government.
JAPAN AS NUMBER ONE
Noting Japan's economy has begun to show signs of recovery, Abe reiterated his pledge to free the economy from the "spell" of prolonged deflation and lost confidence.
"This is an era in which you cannot survive tough competition unless you are No. 1 globally," he said, promising that the government would make it easier for companies to invest on a scale needed to compete with foreign rivals.
Abe said the growth strategy would focus intensively on boosting domestic private investment over the next three years, triple infrastructure exports by 2020 and double farm, fisheries and marine exports to 1 trillion yen by the same date.
In a nod to the farm lobby, which was upset by Abe's March decision to join talks on the U.S.-led Transpacific Trade Partnership free-trade pact, Abe also pledged to double farmers' income over the next 10 years. That would ease the pain of scrapping the high tariffs that currently protect many farmers.
Abe also said the growth strategy would aim to boost the number of annual foreign visitors to Japan to 20 million a year from about 8 million now and triple the overseas sales of "Cool Japan" content such as anime in five years.
Experts have said policy measures announced so far contain some positive steps but fall short of a sweeping overhaul of Japan-style capitalism with "Big Bang" deregulation.
Among the areas where the final package is expected to fall short are steps to free up Japan's rigid labour market to make it easier for firms to shed dying businesses, improvements in corporate governance, and addressing the touchy question of immigration to make up for Japan's shrinking population. ($1 = 101.9600 Japanese yen) (Reporting by Kaori Kaneko; Writing by Linda Sieg; Editing by Raju Gopalakrishnan)